Fannie and Freddie’s Regulator Opposes Making Mortgage Giants Subject to FOIA

Fannie and Freddie’s Regulator Opposes Making Mortgage Giants Subject to FOIA

by Marian Wang ProPublica

Government-controlled mortgage giants Fannie Mae and Freddie Mac were bailed out by taxpayers, but their regulator opposes [1] making them subject to greater transparency requirements under federal public records laws.

Edward DeMarco, acting director of the companies’ now-regulator, the Federal Housing Finance Agency, told lawmakers last week that Fannie and Freddie “did not cease to be private legal entities when they were placed into conservatorship,” according to MarketWatch. (Read DeMarco’s testimony [2] [PDF].)

His argument? Making the companies subject to the Freedom of Information Act would ultimately cost taxpayers:

The mandates that FHFA as conservator preserve and conserve the property and assets of the Enterprises and minimize losses to the taxpayers, may be undermined by subjecting the Enterprises to FOIA, as they will incur significant operational and compliance costs in establishing and administering a function to respond to such information requests. FOIA requests made to the Enterprises would also lead directly to added legal administrative burdens on FHFA, as conservator.

The FOIA blog, a blog dedicated to news about the Freedom of Information Act, has argued that making the mortgage giants subject to FOIA will save money in the long run [3] but surmised that regulators don’t want the extra scrutiny.

Meanwhile, DeMarco voiced concerns about another proposal that would limit how much taxpayers are on the hook for Fannie and Freddie’s legal expenses.

Fannie and Freddie have spent $160 million and counting on legal fees since the government took them over. That’s money that’s gone to defending the companies and their ex-execs against fraud claims, and as the New York Times reported in January, that sum remained secret until just a few months ago [4] when Fannie, Freddie and the FHFA disclosed it at the request of lawmakers.

DeMarco has defended billing taxpayers for the legal fees, saying that forcing employees to pay their own legal expenses and would make it harder for Fannie and Freddie to attract talent.

As the Associated Press notes, it is common [5] for companies to cover their executives’ legal expenses unless they’re found guilty of wrongdoing. Of course, it’s not common for taxpayers to be paying for it.

Overall, taxpayers have spent more than $160 billion [6] so far bailing out the two mortgage giants.

Follow on Twitter: @mariancw [7]

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Comments
8 Responses to “Fannie and Freddie’s Regulator Opposes Making Mortgage Giants Subject to FOIA”
  1. Ron Moss says:

    Just offer him another BONEus.

  2. Pamela says:

    Hold them accountable after all if it was one of us we certainly would be.In fact if anyone of us would have pulled this BS we would be sitting in a prison cell doing hard time.Why would we or should we expect anything less for these rat bastards.Ripping people off is still against the law and all Criminals should be held accountable for there decisions to be involved.Just because it is common practice or thier business model does not make it anymore acceptable it means they are allowed to get away with it.That being the case whats sauce for the goose should be applicable for the gander as well.We need to take our country and our rights back as well and quit being a bunch of bend over buddies.I for one would like to be kissed before,during,or after,thank you at the very least I’d like my hair pulled.

    • These unconscionable criminals have taken victims tax funds to fignt their victims and as usual the victims are on their own. It is time for us victims to push for Elizabeth Warrens appointment during recess and to do a massively wave of contacting our represenatives to let them know all the money in the banks wont get them re elected The people are AWAKENED. This government and the banks have relied on the American people being uninformed and asleep at the wheel. Wakened people can make a difference and stop this corruption. Vote all the obvious crooks out of office and put people in office that have a good track record. Dig for informantion. Dont be asleep at the wheel.

  3. John McCormick says:

    Sounds like they want to be on both sides of the fence! I sent in my FOIA request to FHFA more than two years ago. Never could remember the alphabet soup agency’s real name! What a crock! My note said that I have the right to be conversant with the “holder” (=lender). When I first wrote to the servicer for information they told me that the only way that I could find the lender’s identity was to sue. So I did. I still don’t know the lender’s identity! I asked FHFA and they refused info. What a massive con!
    It’s time for America to shake off the IMf model of mortgage and consumer debt peonage! Let’s return to the “American model” (Carey et al) of finances and end the perpetual war, both actual,( NATO in Africa) and financial.

  4. Rage says:

    Fannie Mae sends scum to go get your houses. Perhaps the so-called deadbeat will be thankful that his tax dollars are helping to pay the lawfirm that is attempting to steal his life savings. This shit is unreal! DeMarco is a witless fool, just like executives at Fannie Mae, many of whom should be in prison for accounting fraud. But hey, they are working for Wall Street, not you, me, our neighborhoods, etc.

  5. Maggie May says:

    GREAT PIC!

  6. Nearing the End says:

    “did not cease to be private legal entities when they were placed into conservatorship,”

    Does this mean homeowners can sue the hell out of them?

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